feature 1 economic value a future enabled by next ......products and services that aggressively...

FUJIFILM Holdings Corporation28

Fujifilm’s AI Technology

AI Technology-use in the Medical Systems Business

Over the 85 years since our founding, Fujifilm has expand-ed into a broad spectrum of businesses based on the technologies we have accumulated through our research and development of photographic film, thereby delivering valuable, innovative products and services that match the needs of our customers. Among these products and services, in the field of medical imaging diagnoses and photo imaging, we have worked to enhance and develop

The Essential High-quality Image Data for AIFujifilm has expanded its medical systems business with a focus on X-ray films since 1936. In anticipation of the arrival of digitalization, however, we were one of the first companies to conduct research and development into digital technologies, and in 1983 became the first compa-ny in the world to launch sales of a digital X-ray diagnostic imaging system. In undertaking the challenge of develop-ing digital X-ray imaging, we uncompromisingly analyzed the radiological interpretation methods that doctors had acquired until that point through experience, including

“which areas doctors focus on during diagnosis” and “what constitutes an image that enables easy diagno-sis.” As a result, we established optimal image processing methods that correspond to specific parts of the body and differences in the recording conditions. This optimization has enabled the stable generation of images that are easy to radiologically interpret and diagnose unaffected by the skill or experience of the radiological technician.

SYNAPSE SAI viewer AI PlatformIn July 2019, Fujifilm launched sales of the SYNAPSE SAI viewer (hereafter, SAI viewer), an AI platform that supports the image diagnosis workflow. This platform is equipped with three types of applications developed by Fujifilm, including those that identify organs from CT images and those that display temporal changes in bone. Going

technologies that bring information of greater value from image data. Our "wisdom" in interpreting these data now serves as the core of Fujifilm's AI technology. By combining this AI technology together with the information, knowledge, expe-rience, and other knowhow we have accumulated through our products, services, and businesses deployed in a wide range of fields, we develop solutions that create new value.

forward, we plan to continue delivering new functions, including applications provided by partner companies. Moreover, by combining the knowhow and high-quality date we have accumulated thus to AI technology, we will deploy solutions that support efficient image diagnosis among doctors, including support for medical imaging diagnosis and streamlining medical sett ing workflows, under t he “RE iL I ” A I technology brand.

AI Linked by IoTSAI viewer is used in connection with a medical-use pic-ture archiving and communication system (PACS), a plat-form for managing and archiving various types of image data used by hospitals. We propose new solutions by combining products enabled by AI technologies including SAI viewer to Fujifilm's PACS, which maintains the largest share of the global industry, together with our broad prod-uct lineup of X-ray imaging diagnostic equipment, endo-scopes, and other devices. Moreover, the use of AI and IoT will also help to improve medical access by resolving doctor shortages in emerging countries and by eliminating the medical disparity between urban and rural areas.

Economic Value

Against the backdrop of progress in digital technology, advances have been made into technologies related to artificial intelligence (AI) and the Internet of Things (IoT), which links all manner of objects through the internet. These technologies have significantly changed the industrial structure, where many companies now provide new products and services that aggressively utilize AI and IoT to make our daily lives more convenient and abundant.In this feature, under the understanding that this paradigm shift is a major opportunity, we describe the Fujifilm Group’s AI technology development-related initiatives designed to connect to business growth and to contribute to solve social issues.

A Future Enabled byNext Generation AI Technology

Feature1

INTEGRATED REPORT 2019 29

PhotoBankThis photo cloud service cen-trally organizes and manages al l types of photographs owned by the user, regard-

less of whether they are analog or digital. We also plan to open a marketplace where an AI infers the inclinations of the user from his or her photographs stored on the cloud

and offers various products and ser-vices that match the user’s likes.

Smart WorkInnovationThis value provision strategy deployed by the document business delivers AI-based

problem-solving document services that match the specific characteristics of different industries and operations. We contribute to the greater efficiency and productivity of operations among our customers as well as to working style reforms by delivering those services in-cluding high-added-value solutions based on systems integration and cloud services and BPO*.

※ Business Process Outsourcing

Drug Candidate Compound Search and Design Simulation Technology “AI-AAM”This is the first technology in the world developed to auto-

matically search and design new drug candi-dates from the structural formula of a known biologically active compound. This system does more than simply search chemical com-pound libraries; it uses AI to enable the design of new com-pounds that could not have been imag-ined before.

HibimikkeThis social infrastructure diag-nostic imaging service greatly improves the efficiency of crack inspection for bridges,

tunnels, and other infrastructure. This service uses the cloud to automatically synthesize images from multiple photographs of bridg-es, for example, that have been uploaded to a server and applies AI-based image analysis to detect cracks. Further, it creates a com-prehensive dataset concerning the de-tected cracks.

Research and Development Framework for Next Generation AIIn 2016, Fujifilm established the Informatics Research Laboratory, which conducts research and development for the purpose of reinforcing and expanding application of information infrastructure technologies that address IoT, AI, and other increasingly sophisticated forms of ICT. That same year we established the ICT Strategy Management Office, which promotes the company-wide shift to ICT. Moreover, in 2018 we opened Brain(s) as an AI technology development base. In addition to enhancing cooperation towards AI use within the Group, we are building a re-search and development framework that advances joint research with academia and collaboration with other com-panies as a means of supporting the development of next generation AI.

AI ×Pharma-ceuticals

Field

AI ×Industrial

Field

Combinationsof Fujifilm GroupBusinesses andAI Technology

Several major examples ofAI technologies

being deployed in a broad range of businesses.

AI ×Medical

Systems Field（→ P.28）

AI ×Imaging

Field

AI ×Documents

FieldA Future Enabled byNext Generation AI Technology

The Future Aimed for bythe Fujifilm Group through AIAgainst a backdrop of progress in the transition to more sophisticated ICT, deriving new value from various types of data by leveraging IoT and AI will connect to corporate competitiveness. As the Fujifilm Group advanced digitalization in the photographic film and diagnostic imaging fields, we accumulated the wisdom to decipher the re-quired information from a limited amount of data. This wisdom serves as the core of the Fujifilm Group’s AI technology. Moreover, through our deployment of a broad range of businesses, the Fujifilm Group has built up information and knowledge, including a chemical compound library and production process knowhow for manufacturing high-quality products. By applying AI technologies imbued with this knowhow into our products and services, we deliver innovative products and services with completely new functions and characteristics to society, and strike a balance between efforts to accelerate business growth and solutions to solve social issues.

*Chief Digital Officer

Akira YodaFUJIFILM Holdings Corporation

Corporate Vice President and CDO*


Sugimoto In general, there are two types of AI, namely Artificial General Intelligence (AGI), which can think and apply information on its own based on the given informa-tion, just as the human brain does, and Narrow AI, which is designed for a specific field and supports and assesses human capability. The latter includes computer-based Japanese chess, self-driving technology, and diagnostic imaging in the medical field. It is this Narrow AI that the Fujifilm Group has spent many years researching in the fields of medical, imaging, and printing. Yamaguchi Fujifilm was one of the first to foresee the arrival of digitalization and has worked on developing its own digital technologies since the 1970s. In the field of photography, we were the first company in the world to develop a fully digital still camera. In the medical field, we also undertook the challenge of developing a technology to replace X-ray film, our core product at the time, which ulti-mately led to our success in digitalizing X-ray imaging. The result was the FCR (Fuji Computed Radiography), the first digital X-ray diagnostic imaging system in the world. As we continued our research and development in this area, we took the lead in the field of medical-use picture archiving and communications systems (PACs), which function to store diagnostic imaging information recorded using various medical-use diagnostic imaging equipment at hospitals and improve medical treatment efficiency. Some of the challeng-es in this field are the limited amount of case history data, precisely reading data recorded under varying conditions, for example physiques and organ sizes differ by individual, compensating for these differences, and converting these

data into a form that supports the judgments of doctors. Through our work in developing the FCR, we perfected our imaging processing knowhow and technology, and es-tablished a technology that can correct data in a way that contributes to the judgments of doctors, even if there is variation in the recording conditions. And this experience is now supporting our development of AI technology. Shimohori In general, effectively training AI using a limit-ed amount of data is said to be very difficult. Until last year, I was primarily involved in software engineering at another company, but I transferred to Fujifilm because I felt the draw of the company with its extremely high level of data asset value, specifically its sophisticated image processing technologies acquired through research and development into photographic film, its stores of data with high market value for medical and other settings, and its ability to de-velop these into specific products and services from the level of compounds and other materials. After entering the company, I still feel that this awareness was correct. Sugimoto The source of Fujifilm’s image processing technologies is photography. This is because we have worked to perfect the technology to automatically adjust image data recorded under various conditions, such as different brightness and equipment, and to print these data in the exact way that they are seen by the human eye or in a manner that approaches the image that remains in the human mind. Yamaguchi Because Fujifilm delivers value through photographs, our history has been considering solutions to problems based on an in-depth understanding of the points on which our customers do not compromise, such as which types of information they want us to visualize. This DNA is also helpful in the medical systems business. The aspect that doctors truly want us to support during the development of medical AI technology is finding those lesions that are difficult to distinguish by the human eye. Upon understanding this, we have set the goals that we must target and work to enable medical AI that will truly be helpful in medical settings. Shimohori The Fujifilm Group is not an IT company, so our mission is not to focus entirely on improving AI tech-nology. As a manufacturer, it is important for us to utilize AI

Please tell us about the source of the Fujifilm Group’s strengths in AI technology development.

How will Fujifilm Group AI technologies evolve? We spoke to employees leading the Group’s research and development efforts about the strengths of the Fujifilm Group’s AI technology development, the status of current initiatives, and the outlook for a future that leverages AI and ICT.

Interview

Economic Value / A Future Enabled by Next Generation AI Technology

Hiroshi YamaguchiFUJIFILM Corporation

General Manager, Imaging Technology Center, Research & Development Management Headquarters

Feature1


Please explain what the Fujifilm Group wants to realize through AI technology development.

in our own products and services in order to offer solutions to the challenges faced by our customers and society. The top management regularly communicate company-wide that solving social issues and using AI are important mis-sions, and those of us on the frontlines of development are strongly aware of these missions. Recently, focus has been placed on strengthening personnel in the area of AI, and Fujifilm has also been enhancing its reorganization and recruitment efforts. Sugimoto The human resources working to develop AI technology include many of the engineers who have been involved in developing software for the photography and printing fields since the 1980s. Until now, Fujifilm also re-cruited a certain number of employees with mechanical engineering and electrical engineering backgrounds at regular intervals, and their skills, abilities, and knowledge have been passed on to research centers and factories. These human resources have now been joined by those who have been involved in the latest AI technology re-search, which is serving as a very positive stimulus in de-velopment settings. Shimohori There are also many engineers who are well-versed in ICT and IoT on the factory lines, so the use of digital technology and the usage rate of so-called IoT and analytics has been surprisingly advanced. And I feel that our culture is to work together beyond fields in achieving the target output. Sugimoto In general, siloed styles where each field is independent for reasons of efficiency seems to be com-mon, but the Fujifilm Group knows from its past experi-ence that everyone coming and working together results in greater output. This is not only true for researchers. Those involved in sales, planning, and developers, among others, interact to communicate on a regular basis, which has led to organic collaboration. I think that this shows how our culture of working together and our stance of attempting to learn about fields that are different from our own is alive and well when creating new businesses by combining different fields together.

Sugimoto The Brain(s) next generation AI technology de-velopment base that we opened in Tokyo last year plays the role of a network hub for strengthening product and service development. Brain(s) has started to give rise to co-recreation that is generating opportunities to collabo-rate with more and more new partner companies.

Yamaguchi One of the things that can be accomplished with AI and ICT beyond simply giving communications capabilities to various objects and connecting them to the internet, is linking the stages before and after the pro-cesses of our solutions that we currently provide. It can create and deploy new value that has not existed before. These many linked products and services are also another strength of the Fujifilm Group. Shimohori These types of initiatives serve to expand the scope of both employees and the company. If we fail to shift our focus away from the areas in which we are involved and expand our vision, and fail to link ideas and technologies from outside the company, in other words areas beyond our individual expertise, with our own exper-tise, experience, and knowledge, collaboration will not find a strong footing.

Sugimoto Exactly true. As the number of new contact points with customers increases and the more collabora-tion progresses, we will necessarily encounter scenarios where existing ways of working are no longer acceptable. In the future, in addition to each employee expanding the scope of their expertise, as a company we will investigate human resources development and organizational frame-works that address these situations. Yamaguchi In respect to expanding scope, the health-care field involves a long process that includes prevention, diagnosis, treatment, and aftercare. By applying AI and ICT to this entire process, we can dramatically expand the scope of optimization. We hope to deploy solutions that only Fujifilm can offer with its business platforms in a wide range of fields that go beyond medical systems to encompass pharmaceuticals, bio CDMO, and regenera-tive medicine. Shimohori The use of AI and ICT is driving progress in applications for and optimization of AI through data collab-orations in all aspects of the value chain. Against a back-drop of dynamic changes going forward, the Fujifilm Group must not only participate in this field, it must also maintain its presence as a truly important partner that is worthy of recognition and expectation from the market. Sugimoto For this reason, we also intend to drive a dig-ital revolution among operations within the company, in other words, increase efficiency of operational workflows and optimize the overall supply chain within the company by using AI and IoT, and establish a system that cooper-ates in real time, and thereby complete the digital transfor-mation of the Fujifilm Group. By combining our products with AI and ICT, we can deliver products and services that connect to the true value demanded by our customers, as well as to solutions for the problems faced by society.

Masahiro ShimohoriFUJIFILM Corporation

Senior Technical ScientistICT Strategy Management Office, Corporate Planning HeadquartersBusiness Development & Creation Division, Corporate Planning Headquarters

Seigo SugimotoFUJIFILM Corporation

General Manager, ICT Strategy Management Office, Corporate Planning HeadquartersGeneral Manager, Informatics Research Laboratory, Research & Development Management Headquarters


Economic Value

100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0

(Billions of yen) （％）386.9

33%

67%

0

300

600

900

1,200

Healthcare

Graphic Systems & Inkjets

Highly functional materials Recording media

(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0

14 15 16 17 18 Operating income (left scale) Operating margin (right scale)

Office products & printers

Others

Production services

Solutions & services

（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)

Operating income (left scale) Operating margin (right scale)

(FY)


(Billions of yen) (Billions of yen)

(FY)14 15 16 17 18

0 14 15 16 17 18 Photo imaging Optical device and electronic imaging

Proportionof revenueFY2019/3

42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion

Operating income/Operating marginRevenue

Revenue Operating income/Operating margin


* Operating income for FY2018/3 came to JPY 78.4 billion, excluding one-time expenses related to structural reforms.

100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





◆Review of FY2019/3◆Consolidated revenue totaled JPY 386.9 billion (+1.0% YoY) thanks to solid sales in all businesses. Operating prof-it came to JPY 51.1 billion (–8.4% YoY), mainly reflecting advertising and promotion costs and R&D investments. Revenue in the photo imaging business was boosted mainly by sales of instant photo systems that enable users to enjoy on-the-spot printing of photos, such as instax se-ries and instax films. As for instant photo system, revenue increased globally, mainly in Europe and the U.S. owing to

the success of our global sales promotion. In the electronic imaging field of the optical device and electronic imaging business, despite the shrinking digital camera market, mirrorless digital camera sales increased in comparison to the previous year mainly thanks to brisk sales of FUJIFILM X-T3. Interchangeable lenses sales also increased due to favorable sales of mirrorless digital cameras. In the field of optical devices, sales remained solid mainly for various in-dustrial use lenses including vehicle-mounted lenses.

Fujifilm Group’s Value Creation

Photo Imaging Optical Device and Electronic Imaging

Imaging Solutions

Provides photo-related products and services, ranging from photo-taking to printing

Provides products such as digital cameras, interchange-able lenses, and TV lenses

100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





Photo imaging▶ Comprehensive strength capable of providing services from

photo-taking to printing▶ Strong market position as a leading company

▶ Growth in the number of photos taken and printing needs due to smartphone proliferation

▶ Expansion of demand in emerging countries for instant photo systems

▶ Single lens reflex camera and smart phone users switching over to or purchasing mirrorless digital cameras due to en-hanced performance

▶ Growth in demand for lenses as IoT advances and security be-comes more important

▶ Increase in demand for high-performance lenses from shifts to 4K and 8K imaging

Optical device and electronic imaging▶ Unique lineup of products equipped with two types of sensors

(APS-C size and large format) that are small, lightweight, and achieve superior color reproducibility owing to in-house devel-oped key devices and unique imaging design technology

▶ Advanced optical technologies and high-precision processing and assembly technologies

▶ Escalation of competition in the mirrorless digital camera market

▶ Enhancement of smartphone camera performance (driving us-ers away from cameras)

▶ Escalation of competition in the high-performance industrial lens market due to competitors’ technological enhancements

Competitive advantages

Business opportunities Risks


Principal Products and Services• X Series digital cameras• GFX Series mirrorless digital camera with a large-format sensor• Interchangeable lenses for digital cameras• TV lenses, cinema lenses• Security camera and security camera

lenses• Projector and projector lenses• Vehicle-mounted lenses

The instax series of instant photo system have been well-loved by customers world-wide for more than 20 years since it was first launched in Japan in 1998. The product is current-ly sold in more than 100 countries and enjoyed great popu-larity mainly among the digital native generation in their teens or 20s. More than 10 million units were sold in FY2019/3, while around 45 million have been sold in total since it first went on sale. In responding to user needs, Fujifilm has left the product’s core feature intact—the ability to print photos immediately—but we have continued to develop and bring various new products to market every year, thereby generating fresh value unique to the instax series. For the instax mini LiPlay that went on sale in June 2019, we added a new sound function

so users can record voices together with photos. One could probably say this edition of the instax is the “ultimate” ver-sion, given that it has features users wanted in an in-depth global survey, such as being compact, lightweight, and having function to print images in their smartphone on instax films. By expanding the horizons of the instax series and suggesting new ways for people to enjoy various situations, we are gener-ating stable earnings along with adding richness to people’s lives with photos by delivering the fundamental photographic values of “shooting, preserving, and shar-ing” photos.

Key points in FY2019/3 results and major initiatives• Sales of instant photo system, instax series and instax films were strong. • Cumulative instax unit sales were 10.02 million in FY2019/3.• In the added-value printing business, sales were favorable for Wall Decor,

which lets customers decorate their walls with stylish photos.• The cloud-based photo service, FUJIFILM PhotoBank, was announced in

February 2019, launched in FY2020/3.

Key points in FY2019/3 results and major initiativesElectronic imaging• Sales were favorable for FUJIFILM X-T3, which is equipped with high-

speed, high-precision auto focus and advanced movie recording, and FUJIFILM X-T30, a compact, lightweight, and high-performance camera.

• Sales were favorable for FUJIFILM GFX 50R, our mirrorless digital camera with a large format sensor, thanks to acclaim for its ultra-high image qual-ity based on Fujifilm’s unique color reproduction technology, as well as the incorporation of range finder style.

Optical devices• We announced FUJIFILM PROJECTOR Z5000, which incorporates the

optical technology of our FUJINON lens in February 2019 and newly en-tered the projector market with its launch in FY2020/3.

Principal Products and ServicesInstant photo systemsPrinting materials • Photographic paper and chemicals for color

prints • Inkjet paper and ink • Thermal paper and ribbonPrinter devices • Minilabs (silver type, inkjet type) • Thermal photo printersLabs and photo printing services • Value-added printing business such as Photobook • Photo printing servicesPhotographing sensitivematerials • Color negative films • Reversal films • QuickSnap

Photo Imaging Revenue JPY 257.5 billion

Optical Device and Electronic Imaging Revenue JPY 129.4 billion

TOPICS

instax SQUARE SQ20

Meeting customer demand and constantly evolving i̶nstax

FUJIFILMX-T3

FUJIFILMGFX 50R

FUJINONPremista28-100mmT2.9

instax mini LiPlay


Economic Value

Healthcare Highly Functional Materials

Graphic Systems & inkjets

Recording Media

Healthcare & Material Solutions

Develops businesses in the fields of medical systems, pharmaceuticals, bio CDMO, regenerative medicine, and life sciences; operates business in the three health fields of prevention, diagnosis, and treatment

Develops the industrial product business which includes display materials, non-destructive testing equipment, and various types of highly functional films; the electronic materials business which includes semiconductor pro-cessing materials; and the fine chemicals business which provides highly functional compounds and reagents

Provides graphic arts films, computer-to-plate (CTP) plates, inkjet digital presses and industrial inkjet printheads Provides products including computer tape and data ar-

chive services

100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





Fujifilm Group’s Value Creation

Healthcare▶ Image processing technologies for providing images suitable

for diagnosis▶ Advanced chemical compounds, design capabilities, and nan-

otechnologies that enable development of pharmaceuticals that respond to unmet medical needs

▶ High levels of technological capabilities to manufacture under constant conditions and superior quality control, utilized in pro-cess development and manufacturing of biopharmaceuticals

▶ The three components essential for regenerative medicine—cells, culture media, and scaffolds—held within the Group

Healthcare▶ Increasing needs for solutions that support medicine and im-

prove work efficiency due to an aging population and shortag-es of medical practitioners

▶ Increasing unmet medical needs, mainly for cancer, rare dis-eases and gene therapies

▶ Expanding market of biopharmaceuticals, which is expected to deliver high efficacy with few side effects

▶ Enhanced industrialization of regenerative medicine▶ Rising awareness of healthy life expectancy and lifestyle-related

ailments

Highly Functional Materials, Recording Media, Graphic Systems & Inkjets▶ Stronger demand for display-related materials from growth in

the OLED and touch panel market▶ Expansion in the semiconductor market from spread of 5G and

automated driving▶ Growing needs for efficiently storing enormous volumes of data

at low cost in the era of big data▶ Expansion in the industrial printing market, such as textiles and

packaging, and growth in inkjet digital printing in these markets

Highly functional materials▶ Advanced technologies, such as functional molecules technol-

ogy for imparting high functionality to film▶ Advanced film forming and coating technologies capable of

supporting thinness and enlargement▶ Cost competitiveness and stable supply▶ Rapid and accurate product formulation capabilities and devel-

opment capabilities, and global production systems

Healthcare▶ Fiercer competition from the rise of new entrants▶ Strengthened laws and regulations for medical equipment▶ Increasing difficulty of new drug discovery▶ Heightened competition from technological innovations in the

biopharmaceuticals market

Highly Functional Materials, Recording Media, Graphic Systems & Inkjets▶ Tougher competition from alternative materials for TAC film▶ More competitive environment in the semiconductor materials

market▶ Weaker-than-expected demand in the graphic arts film and

printing plates▶ Higher raw materials prices




◆Review of FY2019/3◆Consolidated revenue amounted to JPY 1,039.0 billion (+3.6% from the previous fiscal year) due to strong sales in the medical systems, bio CDMO, regenerative medi-cine, electronic materials, and others. Operating income amounted to JPY 97.6 billion (+6.8% from the previous fiscal year), mainly due to an improvement of profitability. In the medical systems business, revenue increased due to strong sales in all business fields such as X-ray imaging diagnostic, medical IT, endoscopes, ultrasound diagnostic and In-vitro Diagnostics fields (IVD). In the pharmaceutical business, revenue decreased mainly due to an influence of generic-drugs in the small-molecular drugs. In the bio CDMO business, the sales in the contract process devel-opment and manufacturing business for biopharmaceu-ticals progressed steadily. In the regenerative medicine business, revenue increased due to favorable sales of cell culture media for biopharmaceuticals by Irvine Scientific Sales Company, Inc. (currently FUJIFILM Irvine Scientific), a leading company in cell culture media that the Group made a consolidated subsidiary in June 2018. In the life sciences business in March 2019, we launched sales of ASTALIFT D-UV CLEAR White Solution, the product with the highest UV protection in ASTALIFT series, as well as the much-improved and renewed skin-whitening ASTALIFT

WHITE Essence Infilt. Revenue rose in the display materials business owing to solid sales of not only TAC products, but also products in the areas of OLED and touch panels. Sales were also strong in the industrial equipment business, particularly for our touch panel sensor film EXCLEAR and our films for measuring pressure PRESCALE. Higher revenue in the electronic materials business was underpinned by sus-tained strong sales of mainly peripheral materials for cut-ting-edge photolithography, CMP slurry, color photoresists for image sensors, and polyimide for advanced packaging. Revenue remained steady in the fine chemicals business, supported by sales of reagents for research institutes in the life sciences field and healthy orders for contracted services mainly in testing and analysis. In the recording media business, revenue decreased due to the inventory adjustment of magnetic tape for high volume data storage and other factors. Revenue also de-creased in the graphic systems business owing chiefly to the impact of overall weaker demand for graphic arts film and printing plates. In the inkjet business, revenue decreased due to such factors as the impact of inventory adjustments of industrial inkjet printheads by customers.

Key points in FY2019/3 results and major initiatives• Revenue increased due to strong sales in all business fields.• In the X-ray imaging diagnostics field, the sales of CALNEO Xair, a porta-

ble X-ray imaging device with a light and small body that supports simple X-ray examinations in limited space, started from October 2018 in Japan. The sales of DR equipment including this new product showed favorable growth and increased revenue.

• In the medical IT field, sales of systems, particularly SYNAPSE, the Pic-ture Archiving Communication Systems (PACS), were strong especially in Japan and the U.S.

• In the endoscopes field, strong sales were seen for such products as the 7000 systems capable of special-light illumination.

• In the ultrasound diagnostics field, sales were strong for products such as the full-flat SonoSite SII and the portable SonoSite EdgeII, in major

markets such as the U.S., Europe, Japan and China.• In the IVD field, the sales of the DRI-CHEM series, a densitometry analy-

sis system, were strong mainly in overseas market.

Principal Products and Services• Digital X-ray imaging diagnostic systems:

FCR, DR• Medical-use picture archiving and communi-

cations systems SYNAPSE• Endoscope systems• Ultrasound diagnostic equipment• In-vitro diagnostic (IVD) systems• X-ray films

Healthcare Revenue JPY 484.3 billion

Medical Systems

Medical-use picture archiving and communications systems SYNAPSE


Economic ValueFujifilm Group’s Value Creation

Key points in FY2019/3 results and major initiatives• In the regenerative medicine business, revenue increased due to favora-

ble sales of cell culture media for biopharmaceuticals by Irvine Scientific Sales Company, Inc. (currently FUJIFILM Irvine Scientific), a leading com-pany in cell culture media.

• FUJIFILM Cellular Dynamics, a subsidiary in the U.S., launched iCell® Microglia from January 2019, an iPSC-derived cell type that enables an evaluation of new medicines for degenerative neurological diseases such as Alzheimer’s disease in a similar environment to the human body.

Key points in FY2019/3 results and major initiatives• In March 2019 we launched sales of ASTALIFT D-UV CLEAR White

Solution, the product with the highest UV protection in ASTALIFT series, as well as ASTALIFT WHITE Essence Infilt with enhanced beauty effect.

• Revenue from supplements increased thanks to robust sales mainly in our Metabarrier series.

Principal Products and Services• iPSC-derived cells for

drug discovery support•Recombinant peptide•Autologous cultured

epidermis/cartilage•Media cell culture

Principal Products and Services• Functional cosmetics• Nutritional supplement products• Hair care products

Regenerative Medicine

Life Sciences

Autologous cultured epidermis JACE®

ASTALIFT D-UV CLEAR White Solution

ASTALIFT WHITE Essence Infilt

FUJITAC protective film for polarizers

Key points in FY2019/3 results and major initiatives• Revenue increased on solid sales of not only TAC products, but also

products in the areas of OLED displays and touch panels.

Principal Products and Services• Protective film for polarizers• Film for expanding viewing

angles• Materials for OLED/touch panel

Highly Functional Materials Revenue Revenue JPY 278.0 billion

Display Materials

Key points in FY2019/3 results and major initiatives<Pharmaceuticals>• In the pharmaceutical business, revenue decreased mainly due to an in-

fluence of generic drugs in the small-molecular drugs.• In March 2019, clinical trials were started with National Cancer Center

Japan for new immunotherapy of cancer utilizing its liposome, a drug de-livery system technology.

<Bio CDMO>• In the bio CDMO business, contract orders for process development and

manufacturing of biopharmaceuticals remained brisk.• In March 2019 we announced the acquisition of Biogen (Denmark) Man-

ufacturing ApS, a manufacturing subsidiary of major US biopharmaceuti-cals corporation Biogen Inc.

Principal Products and Services• Small-molecule drugs• Radiopharmaceuticals• Contract development and manufacturing

organization of biopharmaceuticals

Pharmaceuticals, Bio CDMO

Culturing tank for biopharmaceutical manufacturing

Accelerating expansion of bio CDMO business


We are currently expanding our operations in the potentially high-growth bio CDMO business by actively making invest-ments to augment our capabilities. In August 2019 we ac-quired and consolidated a manufacturing subsidiary of US-based biopharmaceutical giant Biogen Inc. Accordingly, the Group now can swiftly respond to the broad ranging needs of customers, from small production volumes to much larger, having access to large-scale production facilities on top of existing facilities such as maneuverable 2,000-liter single-use tanks suitable for the production of different types of biop-harmaceuticals, and the latest mobile clean rooms equipped with sophisticated virus containment capabilities. Moreover, by leveraging our advanced production and quality control technologies honed in the photographic film business, along with the biotechnologies of our Group companies, we seek to

develop technologies for further enhancing productivity. We also set our sights on making a full-fledged entry into the drug formulation business in which we hope to provide one-stop contract development and manufacturing, from active phar-maceutical ingredients through to pharmaceutical preparation. We will continue to expand this business by taking on orders for contract development and manufacture of various types of biopharmaceuticals, including those expected to grow in de-mand like antibodies, hormone products, vaccines and gene therapy drugs. We are target-ing revenue of JPY 100 billion in this business in FY2022/3.

TOPICS

LTO Ultrium 8 data cartridge computer tape with BaFe magnetic particles

Key points in FY2019/3 results and major initiatives• Revenue decreased due to the inventory adjustment of magnetic tape for

high volume data storage and other factors. • Fujifilm certainly meets customer’s need in this big data era by expanding

the sales of magnetic tape for data storage, which uses barium ferrite (BaFe) particles and also providing a data archive service etc.

Key points in FY2019/3 results and major initiatives• Revenue decreased owing chiefly to the impact of overall weaker de-

mand for graphic arts film and printing plates.• In March 2019 we started selling Jet Press 750S, the latest model in our

Jet Press series of inkjet digital presses for commercial printing. We will achieve further growth in this business by developing and selling innova-tive products for the increasingly digitalized commercial printing market.

• Revenue decreased due to such factors as the impact of inventory ad-justments of industrial inkjet printheads by customers.

• In addition to commercial printing and sign display fields, we are develop-ing unique products and expanding our business into new fields such as textiles and packaging.

Key points in FY2019/3 results and major initiatives<Industrial Products>• Sales were robust particularly for our touch panel sensor film EXCLEAR,

along with solid sales of pressure measurement film PRESCALE.

<Electronic Materials>• Revenue increased, reflecting strong sales of such products as advanced

peripheral materials related to photolithography, CMP slurries, color resist for image sensor, polyimide for advanced package and others.

<Fine Chemicals>• Revenue remained steady supported by the solid sales of laboratory

chemicals for research institutes and contract services for inspections and analysis in the life science field.

Principal Products and Services• Magnetic recording tape for

computers• Data archive service

Principal Products and Services• Printing materials, CTP plates• Inkjet digital presses• Ink for inkjet printers• Industrial inkjet printheads

Principal Products and Services<Industrial Products>• Non-destructive testing equipment and

materials• Sensor film for touch panel

<Electronic Materials>• Semiconductor processing materials

<Fine Chemicals>• Highly functional chemicals• Laboratory chemicals

Recording Media Revenue JPY 38.8 billion

Graphic Systems & Inkjets Revenue JPY 236.7 billion

Industrial Products, Electronic Materials, Fine Chemicals

Jet Press 750S

Bio CDMO businessBase in Denmark (inside the factory)


Economic ValueFujifilm Group’s Value Creation

100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





◆Review of FY2019/3◆Consolidated revenue totaled JPY 1,005.6 billion (–4.0% YoY) due to such factors as a reduction in low-profitabili-ty parts of the low-end office printer business. Operating income rose sharply to JPY 96.4 billion (11.5 times YoY), mainly reflecting profitability improvements and a positive impact from structural reforms and so on. In the office products field of the office products and printers business, overall sales volume decreased from the previous fiscal year, although the sales were solid for the ApeosPort-VII C /DocuCentre-VII C series consisting of color multifunction

devices with enhanced security functions added in De-cember 2018. In the production services business, though the overall number of sales unit fell from the same period of the previous fiscal year, strong sales remained for an on-demand production color printer called the Iridesse™ Production Press especially in Europe and the U.S.. In solutions & services business, overall revenue increased due to new contracts for BPO (Business Process Out-sourcing) and solid sales of business-specific solutions.

Office Products & Printers

Production Services

Solutions & Services

Document Solutions

Provides digital multifunction devices and printers for offices and consumables, along with document solutions using cloud and mobile technologies.

Provides high-speed, high-image-quality digital printing systems and associated services as well as　solution-ori-ented document services, such as printing work flow solutions, in the commercial printing field.

Supports the resolution of management issues through services that improve corporate document and opera-tional processing, such as solution services and man-aged print services (MPS) using AI and IoT.

100

200

300

400 51.1

13.2%

15

30

45

60 20.0

15.0

5.0

10.0


33%

67%

0

300

600

900

1,200

Healthcare



(Billions of yen)

0

97.6

9.4%

25

50

75

100 20.0

15.0

5.0

10.0

25

50

75

100 10.0

7.5

2.5

5.0

0

0



Others

Production services


（％）

0 14 15 16 17 18

（％）

1,039.0

23%4%

26%

47%

300

600

900

1,20096.4

9.6%1,005.6

26%5%

12%

57%

14 15 16 17 18

0 0 014 15 16 17 18

(FY)

(Billions of yen)

(FY)

(FY)

(Billions of yen)

(FY)


(FY)



(FY)14 15 16 17 18



42.7%

JPY 1,039.0billion


41.4%

JPY 1,005.6billion


15.9%

JPY 386.9billion





▶ Excellent customer base leveraging a robust direct sales struc-ture in Japan and the Asia-Oceania region

▶ Robust sales capabilities that can help solve the increasingly complex and diverse management issues of customers, as well as a lineup of cloud-based products and supporting doc-ument technology for delivering total solutions

▶ Stronger demand for office equipment and related services in emerging markets such as China and Southeast Asia

▶ Expansion of markets for solutions and services utilizing AI and cloud computing in advanced countries like Japan, where needs are growing for higher office productivity amid a push to increase work efficiency and reform work styles

▶ Expansion of the industrial printing market for such as textiles and packaging, and growth in inkjet digital printing in these markets

▶ Decline in the number of pages printed as the digitalization of corporate business processes replaces printing systems

▶ Decline in profitability due to tougher competition in office equipment markets in advanced countries




TOPICS

Key points in FY2019/3 results and major initiatives• In the office product field, Overall sales volume declined year on year.• Sales were solid for the ApeosPort-VII C / DocuCentre-VII C series con-

sisting of color multifunction devices with enhanced security functions added in December 2018.

• In the office printer field, low-profitability parts of low-end printers busi-ness were reduced.

Key points in FY2019/3 results and major initiatives• Overall sales volume declined year on year.• Strong sales remained for an on-demand production color printer called

the Iridesse™ Production Press especially in Europe and the U.S. • In January 2019, Fuji Xerox announced the launch of the 11000 Inkjet

Press, a high-speed roll color inkjet printer for commercial printing with image quality comparable to that of offset printing. Its sales started from February 2019 in Japan.

• We aim to realize further growth in this business by expanding the digital-ization of the commercial printing.

Key points in FY2019/3 results and major initiatives• Revenue increased due to new contracts for BPO （Business Process

Outsourcing）and solid sales of business-specific solutions.• In February 2019, Fuji Xerox began offering a cloud-based accounts

payable management system under partnership with Esker. The system significantly reduces cumbersome operations of processing bills by utiliz-ing AI (artificial intelligence).

• We aim further growth in the service field by continuously providing ser-vices that support customers in diversification of work styles under the new value creation strategy called Smart Work Innovation.

Principal Products and Services•Color/monochrome digital

multifunction devices• Color/monochrome printers

Principal Products and Services• On-demand publishing systems• Computer printing systems

Principal Products and Services• Business-specific solutions• Managed print services (MPS)• Business process outsourcing (BPO)

Office Products & Printers Revenue JPY 569.1 billion

Production Services Revenue JPY 123.3 billion

Solutions & Services Revenue JPY 261.2 billion

Office-use full-color digital multifunction device ApeosPort-VII C5573

IridesseTM Production Press, a color on-demand publishing system for the printing market

Harnessing AI technology to solve management issues of customers and social issues

Fuji Xerox Co., Ltd. continues to expand the solutions & ser-vices business. Up until now, we have provided services us-ing AI and solutions that enhanced connectivity multi-function devices and the cloud. In February 2019, we began offering a cloud-based ac-counts payable management system under partnership with Esker (France), a leading firm in accounts payable management services. In addition to improving the efficien-cy of invoice processing, the implementation of this system will shorten the lead time required between application and approval, visualize unpaid amounts and invoices to be pro-cessed, and support to strengthen governance. We will continue to develop collaboration with various part-ners like Esker and maintain our long-established and robust

customer base, the knowledge and experience we have amassed in working with our customers to improve their of-fice work and our proprietary AI technology in which we have carried out R&D since 1980s. By drawing on these strengths, we expand solutions that support the improving of work effi-ciency and the creation of new value for customers.